'CVS Takes My Breath Away': More Squawk From Jim Cramer

CVS' decline after reporting mixed 2016 third-quarter financial results is indicative of two lost contracts to Walgreens.

NEW YORK (TheStreet) -- Shares of CVS Health (CVS) were plummeting by 13% in mid-morning trading on Tuesday, after the company reported mixed financial results for the 2016 third quarter before Tuesday's market open. The Woonsocket, RI-based healthcare company also cut its full-year profit forecast due to slowing prescription growth and network changes in the market.

"CVS takes my breath away," TheStreet's Jim Cramer said on CNBC's "Squawk on the Street" this morning. "The 40 million prescriptions they are losing, 40% is Prime, 40% is Tricare."

CVS lost a pivotal contract to fill prescription orders through the Tricare pharmacy network to Walgreens in September. The Tricare network is a health care program for service members and their families with around 9.7 million members.

Additionally, CVS lost a separate contract with Prime Therapeutics, the fourth-largest U.S. pharmacy benefit manager and its 22 million members to Walgreens in August.

"Deals with Prime and Tricare were the reasons for the 40 million and they explicitly called out the Walgreens deals. These are Walgreens' deals with Prime and Tricare, two networks that went to Walgreens," Cramer explained.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

The team rates CVS as a Buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations and reasonable valuation levels. The team feels its strengths outweigh the fact that the company has had sub par growth in net income.